Manchester City may abort their proposed move for Edin Dzeko unless Wolfsburg lower their financial demands and accept that the most powerful spenders in English football are not prepared to pay around £45m for the Bosnian striker.

Roberto Mancini, the City manager, wants to pair Dzeko with Carlos Tevez in the coming season but several weeks of on-off negotiations have reached an impasse, with a huge disparity in the valuation from either side. Dzeko has scored 54 goals in 94 games for Wolfsburg and the Bundesliga side have said they will do business only if they receive an offer of £40m-£50m. City regard that as exorbitant and are refusing to budge, determined not to be regarded as a soft touch when faced with selling clubs trying to take advantage of the financial position at Eastlands.

There were similar reasons behind City's decision not to follow up their initial moves for Benfica's centre-half David Luiz, having been quoted £29m, and an increasingly familiar pattern is also threatening to bring an end to their interest in James Milner. Aston Villa have asked for £30m, whereas City have made an offer of £18m plus £2m in add-ons. Unless a compromise can be reached, around £24m, City will reluctantly give up, despite an increasing acceptance within Villa Park that Milner wants the transfer to happen.

"Eventually if players do want to leave the club, or any football club for that matter, it becomes more difficult than ever before," Martin O'Neill, the Villa manager, said today. "But we have a better chance of performing in the manner in which we did last season if we keep our best players and James Milner comes into that equation."

As for Dzeko, his representatives are also speaking to Juventus but, again, Wolfsburg would have to lower their demands for a deal to happen. The player has expressed his frustration about Wolfsburg's asking price and City's position can be gauged by the fact the 24-year-old had a £35m release clause until the end of May but that, too, was considered excessive by the club's chief executive, Garry Cook, and football administrator, Brian Marwood. There is a feeling at Eastlands that they need to make a stand when it comes to negotiating fees because the alternative is that they will always be expected to pay considerably more than other clubs.

City have already spent around £60m this summer on Jérôme Boateng, David Silva and Yaya Touré and are trying to negotiate a price with Internazionale for the talented but problematic wide player Mario Balotelli. As for outgoings, Robinho has emerged as a possible target for Milan if, as expected, Ronaldinho leaves San Siro for Flamengo.